Tag Archives for " hillary clinton biotech "
A Trump vs. Clinton Options Strategy
Tonight we’ll see the first US Presidential debate debate between Donald Trump and Hillary Clinton. I’m going to leave my personal opinions about both candidates out of this, and keep it focused on the markets. A major reason biotech (IBB) has rallied in recent weeks was Hillary Clinton’s pneumonia diagnosis. Since she has been an outspoken critic of rising drug prices — specifically targeting Mylan’s (MYL) Epipen — she is seen as an enemy of biotech and big pharma. Her illness boosted Trump in the polls, which in turn gave biotech a reprieve. That’s perhaps a bit ironic, because Trump himself has been critical of drug company pricing practices. So heading into the debate, there appears to be a binary outcome — not between the candidates, but whether or now there is a decisive outcome. If it’s a close call, that will just add to the confusion and the impact on stocks is a wash. But if one side scores a big victory, odds are these stocks move, at least in the early going. So I’d look at the following trades depending upon one’s stance about the outcome: Benefits from a big Clinton or Trump victory: -Buy IBB $295 straddle expiring October 15 for $7 (give or take 10 cents) Benefits from a stalemate: -Sell IBB weekly $285/$290/$300/$305 iron condor expiring Friday for $1.88 (give or take 5 cents) I’d keep any positions small, and would look to close out either one tomorrow on the open.
Continue Reading -->The Morning Hammer: Tension Is On the Tape
European equities are down again this morning on bank weakness. German Chancellor Angela Merkel ruled out state assistance for Deutsche Bank (DB) before next year’s national election, which is hitting the stock hard, and in turn, other European banks. DB faces a $14 billion bill from the Department of Justive related to MBS activities during the bubble. They are appealing, but shareholders are very concerned that the bank will have to raise cash. The Euro Stoxx 600 is down -1.4% with financials down -2.0%. The drama is driving demand for safety assets, and the yen, (BTW, you should read Kurt Capra’s great work on USDJPY) German bunds, and US Treasuries are ticking higher. Crude oil is near $45 after Algerian Energy Minister Noureddine Boutarfa said Sunday that Saudi Arabia offered to cut production to January levels. But keep in mind that oil headlines are running wild ahead of the OPEC meeting this week, which is an “anything goes” event. German business sentiment hit a 2-year+ high. However, UK mortgage approvals dropped sharply in August. The Bank of Japan reported that corporate cash and household deposits hit an all-time high as business and consumers remain reluctant to spend. On the deal front, CBOE (CBOE) is buying BATS Global (BATS) for $3.2 billion. Funny, last week there was a rumor that CBOE itself could be in play — but I guess someone got their wires crossed. Tonight, we’ll have the first Presidential debate between Hillary Clinton and Donald Trump. If either candidate gets a decisive victory, we could see a real move in biotech tomorrow. (down if Clinton wins, up if Trump wins) SPX futures are down in the early going, and I guess we’re going to see if bears are ready to make a real stand. Friday was a modestly ugly day, but the bears have been flopping bretty bad since June. It’s hard to tell when that will stop, but tension is starting to build on the tape again.
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